Arum Group Invests Another €80M to Expand La Manga Club

20 November 2018 – Eje Prime

Arum Group is getting its wallet out to expand its resort in Murcia. The Spanish property developer, chaired by the magnate Jordi Robinat, is planning to invest more than €80 million in the upcoming expansion of La Manga Club, its residential complex located in the municipality of Cartagena, according to explanations provided by sources at the group speaking to Eje Prime.

The company is already processing a new partial plan to expand the resort by more than 48,000 m2, with the aim of developing new homes. Moreover, if the operation goes ahead, the group forecasts that the building work will begin between the end of next year and the beginning of 2020. The scheduled execution period is between three and four years.

Currently, La Manga Club has a surface area of 1.3 million m2, contains 2,300 homes, two 5- and 4-star hotels, three golf courses (one of which has 18 holes), thirty clay tennis courts, eight soccer fields and a cricket pitch.

With the majority of the residential assets now sold, Arum Group is developing the last one hundred homes, which will be primarily dedicated to international buyers. “English investors are the most common, although increasingly, we are closing more operations with Norwegian clients, as well as Belgians and people from other countries in the north of Europe”, explain sources at the company.

La Manga Club is the only project that the Arum Group has underway in the Region of Murcia. In fact, the property developer owned by Robinat purchased the complex from the Anglo-American cruise company, The Peninsular&Oriental Steam Navigation (P&O), in 2004 for €146 million.

Since then, the Spanish company, headquartered in Barcelona, has undertaken several expansions of the resort, which is one of the largest in southern Europe. The company owns three other residential projects currently underway in Spain, two in Cataluña and one in Tenerife.

The transformation of the Arum Group

The origins of the Arum Group date back to the 1990s, when Jordi Robinat, one of the people responsible for the launch and subsequent sale of the iconic Palace and Ritz hotels in Madrid, decided to set up on his own. He did so initially by creating the firm Med Resort before then formalising the expansion of the company in the Spanish real estate sector, under the brand Medgroup.

With that company, which at the time included George Soros and the former Goldman Sachs banker, Richard Perry, amongst its largest shareholders, Robinat introduced the tourist resort complex to the Spanish coast by integrating homes, hotels, golf courses, spa centres and commercial premises into the same complex.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Lone Star Sells c.1,000 NPLs & 600 Foreclosed Homes To Cabot

3 April 2017 – Idealista

The loan management firm Cabot has purchased Project McLaren from the US fund Lone Star. The portfolio contains more than 1,000 non-performing mortgages worth €102 million and more than 600 homes with a combined appraisal value of €51 million, according to financial sources consulted by Idealista. The properties that secure the mortgages and the homes are primarily located in Madrid, Andalucía, Cataluña and the Community of Valencia.

Cabot, together with Link Finanzas, were the two firms that initially expressed interest in this portfolio, but in the end, the former has acquired the project for an amount that has not been disclosed.

On the basis of their appraisal values, the properties that secure the mortgages are located primarily in Andalucía (21%), Cataluña (21%), Madrid (15%), the Community of Valencia (12%) and the Canary Islands (10%). In terms of the portfolio of homes, they are primarily located in Andalucía (26%), Cataluña (21%), Madrid (12%) and the Community of Valencia (11%).

Lone Star has become one of the most active funds in the Spanish real estate market. Following its purchase of the real estate company Neinor from Kutxabank for €930 million, the fund now wants to become the largest property developer in the country. Neinor Homes debuted on the stock market last month.

Another important operation was Cabot’s purchase, together with JP Morgan, of a package of real estate loans from Commerzbank worth €4,400 million. That portfolio contained loans secured by high-quality assets such as the Zielo Shopping Centre in Pozuelo de Alarcón (Madrid) and the MN4 Shopping Centre in Valencia, as well as the Ritz and Gran Meliá Fénix hotels.

Meanwhile, Cabot Credit Management is the largest manager of unpaid debt in the United Kingdom and Ireland. In 2015, together with the fund Elliot Asesores, it acquired the platform Paratus, which specialises in the management of problem assets. Since last year, it has also owned Gesif, another platform specialising in debt management and investments in portfolios of problem loans in Spain. (…).

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake

2015: A Record Breaking Year For RE Investment

3 December 2015 – Expansión

Real estate investment in Spain will close 2015 at record breaking levels. According to the consultancy CBRE, the purchase of hotels such as the Ritz in Madrid, shopping centres such as Plenilunio and offices such as Torre Espacio, as well as operations such as the purchase of Testa, have driven up investment volumes in the sector to reach €12,250 million by 1 December. CBRE expects the sector to close the year with volumes of around €13,000 million, a figure never seen before in the Spanish market.

“2014 was a record year in terms of tertiary investment (non-residential assets). This recovery in the market saw investment volumes of more than €10,000 million, which equalled those seen in 2007 – the previous record-breaking year -. 2015 has not only seen a strengthening of this trend, it has also seen growth of 25%”, said Mikel Marco-Gardoqui, Head of Investment at CBRE España. “Moreover, it is worth noting that asset prices are now 30%-40% lower than they were in 2007”, adds Julián Labarra, Director of the real estate consultancy.

This record level has been boosted by the largest operation ever seen, namely the Socimi Merlin Properties’s purchase of the real estate company Testa for €1,800 million. Testa holds a portfolio of assets – mainly offices – worth more than €3,000 million. Nevertheless, even excluding that transaction, investment is growing at “an exponential rate”, with increases in the purchase of all types of assets. (…).

Offices, which continue to be investors’ preferred asset, have now reached an investment volume of €5,600 million, thanks to purchases such as Torre Espacio, by the Philippine businessman Andrew Tan for €558 million, and Castellana 89, by Corporación Financiera Alba for €144 million.

Currently, these properties in Spain offer investors minimum yields of between 3% and 3.75% in the case of well-located commercial premises and maximum yields of 6.5% in the case of specific logistics assets.

Hotels

Hotels, in particular, have experienced a significant boost this year. “In 2014, hotel investment volumes amounted to around €1,100 million and so far this year, that figure has already surpassed €1,900 million, which means that we expect to close the year with an investment volume of €2,000 million”, says Marco-Gardoqui.

The boost from investors has not only been felt in the purchase of non-residential assets, interest has also increased in the acquisition of land and property developments for joint promotion with local property developers. (…).

Looking ahead to next year, the experts at the consultancy firm expect that interest from the funds will continue. “We think that investment will amount to around €10,000 million in 2016, because although there will be fewer operations, prices will increase. Many funds are still raising funds, with specific amounts earmarked for Spain”, says Heriberto Terual, Director of Corporate Finance at CBRE.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

BlueBay Signs JV With Nadhmi Auchi To Operate Hotel Miguel Angel

18 September 2015 – Cinco Días

The Madrilenian Hotel Miguel Angel is going to be operated by a prestigious player once more, but not one that has a significant international presence. The hotel chain BlueBay will manage the property from now on, after it reached an agreement with the owner, the Iraqui born Briton Nadhmi Auchi, who has been running the hotel since December 2013, when Occidental Hoteles departed, whereby putting an end to its operations in Spain.

All of the international hotel chains have had their eyes on Hotel Miguel Angel, amongst others, since the Four Seasons announced its arrival in Madrid, in the Canalejas complex, and Mandarin announced its acquisition of the Ritz. In the end, the Spanish firm BlueBay, owned by investor Jamal Satli Iglesias, will take over the management of the property, which has 267 rooms, under an agreement that will involve the creation of a joint venture between BlueBay and Nadhmi Auchi. Together, they will invest around €35 million on the refurbishment. The renovation will be completed over the next few months and will involve the creation of new facilities and the expansion of the gastronomic offer, according to the chain, which aims to convert the hotel into “one of the most emblematic luxury, 5-star establishments in the city and in Spain”, said the CEO of BlueBay, Joaquín Janer.

This operation is BlueBay’s first foray into Madrid – traditionally, the company has a strong presences in the holiday hotel market, but not in the city hotel segment – it owns one 3-star hotel in Barcelona and two hotels in Mérida (one 5-star and one 4-star). BlueBay’s portfolio contains 52 properties across 27 locations. It will soon add eight more assets as a result of its international expansion, which will take place in the Middle East, Latin America and Europe. In April, it announced its expansion into Morocco and it plans to start constructing four hotels in Brazil this quarter.

In Spain, BlueBay is also working to open two other properties, in Marbella and Estepona, in 2018, which will require an investment of around €100 million. The chain, founded in 1976, operates six brands, including the urban specialist BlueCity. The brand used to be owned by Marsans, but following that company’s bankruptcy in December 2009, the businessman Jamal Satli Iglesias acquired it from Posibilitum, in an operation that included the management of 11 hotels. Satli Iglesias also holds a stake in Málaga Football Club, through which he has a dispute pending with its chairman, Abdullah Al Thani.

Renovation of Madrid’s luxury hotels

The refurbishment of Miguel Angel will represent a new boost for the 5-star segment in the capital, following the arrival of Four Seasons, which resulted in a “pull effect” in Madrid for other major international operators. During this time, Mandarin joined forces with the Olayan Group to purchase the Ritz. Despite this, the city’s hotel market is still missing companies such as Hyatt, Kempiski, Hilton, W and Shangri-La, although the details of the Wanda group’s plans for its hotel project at Edificio España have not yet been revealed. One of the most tempting properties for investors and operators over the coming months will inevitably be the Villa Magna, whose owner rejected a purchase offer from Jaime Gilinski in August for €190 million, and the (Westin) Palace. The owners of the latter have set a sales price of €330 million for the establishment.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake

Gilinski Acquires Hotel Villa Magna For €190M

30 June 2015 – Expansión

The Colombian investor has acquired the exclusive Madrilenian hotel for €190 million and is now negotiating the contract for the management of the property with the international hotel chains Marriott and Starwood.

The Colombian businessman Jaime Gilinski (pictured above) has agreed the acquisition of the Hotel Villa Magna in Madrid for €190 million. The proeprty is currently owned by Sodim, a holding company controlled by the Portuguese Queiroz Pereira family. The deal is expected to be signed within the next few days (…).

The transaction represents the largest hotel purchase in recent times in Madrid. Last month, the Ritz Hotel was sold to the Saudí group Olayan, in a joint venture with the Mandarin Group for €130 million; and in May 2014, Katara Hospitality purchased the Intercontinental Hotel for €70 million. The consideration also comes close to the €200 million paid by Qatari Diar in 2013 for the W Hotel in Barcelona.

The Queiroz Pereira group purchased Hotel Villa Magna in 2001 from the Japanese company Shirayama for €80 million, and spent a further €50 million on the refurbishment of the property.

The deal, coordinated by the real estate consultancy JLL, has been closed in record time since the process for marketing the property officially began less than a month ago and reflects the interest that exists for real estate assets in Spain. Gilinski’s offer exceeds the property’s asking price (€180 million) by €10 million.

Once the deal has been signed, Gilinski will focus on reaching an agreement for the management of the property. After ruling out other options, he is currently negotiating with two candidates, namely, Marriott and Starwood.

The hotel is currently operated by the Queiroz family following the departure of the US hotel chain Hyatt in 2009, which managed the property for almost two decades.

The Hotel Villa Magna has 150 luxury rooms, including suites (measuring between 30m2 to 290m2), following the refurbishment work undertaken by the former owners, between 2007 and 2009.

Commitment to Spain

The new owner of Villa Magna arrived in Spain in 2013 after acquiring 5% of Banco Sabadell. Since then, he has not only increased his stake in the bank to become the largest shareholder in the Spanish entity, he has also evaluated opportunities in other sectors, such as real estate.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Who Are The New Advisors In The RE Sector?

8 June 2015 – Expansión

The ‘big four’ audit firms and the investment banks are starting to advise on deals in the property sector, where specialist firms, such as Aguirre Newman, CBRE, JLL and Knight Frank, have been operating for more than 30 years.

Specialisation versus multi-disciplinary teams. The real estate investment boom in Spain is attracting both specialist consultancy firms and new players from the world of audit and banking. All of them are competing to advise on the major property transactions, both on the purchase and sale of companies, as well as of individual assets. This market saw investments reach €2,500 million during Q1 2015.

The large specialist consultancy firms arrived in Spain three decades ago. Having established themselves in the Anglo-Saxon markets, they were looking for other markets to advise companies and investors in their search for properties and land.

Such was the case of Jones Lang LaSalle (now JLL), Richard Ellis (now CBRE) and Knight Frank, which still lead the market for consultancy and transaction advice, together with a Spanish company: Aguirre Newman. The latter, created by Santiago Aguirre and Stephen Newman, is the only Spanish firm that competes with the multi-nationals to advise on large transactions.

Besides these four large firms, there are other international companies such as BNP Paribas Real Estate, previously known as Atisreal, Savills, Catella and the US firm Cushman & Wakefield.

(…)

Now, the RE teams from the large auditors – known as the big four – are entering the market. They have strengthened their teams in recent months, hiring staff from the real estate consultancies, and are taking advantage of the synergies they can offer with other departments (legal, tax, financing) to secure advisory contracts….Many international investors prefer this one-stop-shop model, especially when they are in a hurry to close a deal.

(…)

In this way, PwC has just advised on one of the largest transactions in the RE sector, the sale of the Ritz Hotel in Madrid (pictured above). PwC acted on the buy-side, advising Mandarin Oriental, whilst the vendors – Omega Capital (Alicia Koplowitz’s investment company) and Belmond (formerly Orient-Express) – worked with JLL. PwC has also advised on other recent transactions, such as the sale of the Plenilunio shopping centre to Klepierre.

Meanwhile, Deloitte Real Estate advised the US fund Tiaa Henderson on its purchase of the Islazul shopping centre in Madrid for €230 million, as well as on the sale of a batch of office buildings to the largest Socimi in the market, Merlin Properties. KPMG’s RE team is working with Credit Suisse to jointly advise Bankia on the sale of its Big Bang portfolio, the largest RE asset portfolio seen to date. It also advised Cerberus Capital and Orion Capital Management of their purchase of 97% of Sotogrande, amongst others.

The investment banks are also competing well with the consultancy firms and the big four, especially on the larger deals. They tend to receive buy-side or sell-side mandates for individual buildings and companies with asset portfolios.

In this way, N+1 is currently working with Popular on the sale of a RE portfolio, known as Project Elcano, worth €415 million. It is also working with Sareb on the disposal of part of the Polaris World portfolio.

Nevertheless, although there may be cases in which an investment bank works by itself on a RE transaction, the work performed by the large firms and the consultancies is usually complementary. The banks provide the financing and structuring advice; the RE consultancies value the assets.

(…)

Original story: Expansión (by G. Martínez, D. Badía and R. Ruiz)

Translation: Carmel Drake